Goldman cuts US Q2 GDP estimate to 3 pct from 3.9 & One more hike for the yr
Friday July 23, 3:07 pm Eastern Time
Goldman cuts US Q2 GDP estimate to 3 pct from 3.9
NEW YORK, July 23 (Reuters) - Goldman Sachs & Co. said on Friday it was slashing its estimate for second-quarter U.S. gross domestic product growth to 3 percent from 3.9, saying the drag from the trade deficit is likely to be larger than expected.
In their latest weekly economic commentary, Goldman economists noted the surprising surge to a record $21.3 billion U.S. trade deficit in May, led by a 2.2 percent rise in imports and a 0.8 percent fall in exports. The trade data were released earlier in the week.
The economists, in a report, said they had cut their second quarter GDP growth forecast to 3 percent and added that ''the figure may be even lower, given the potential for low-side surprises in inventory accumulation.''
GDP grew at a 4.3 percent annual rate in the first quarter.
The Commerce Department will issue the advance estimate of second-quarter GDP growth on Thursday. Economists polled by Reuters, on average, expect a growth rate of 3.3 percent for the April-June quarter.
Goldman said that in the wake of Federal Reserve Chairman Alan Greenspan's congressional testimony on Thursday, it was ''comfortable with our view that one more rate hike is likely this year, probably in early October.''
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